Posted by Diane (TX) on December 08, 2004 at 21:19:03:
Capital gains are calculated from your cost basis. Your cost basis usually doesn’t equal your mortgage balance. Also, capital gains are only reported when you sell. Refinancing isn’t a sale.
Say your refinanced mortgage is $100,000. You get back $20,000 cash. Your cost basis is $80,000, plus any extra costs you may have incurred.
Refi a quitclaim & cap gains taxes? - Posted by Christi
Posted by Christi on December 07, 2004 at 16:20:14:
I am looking to purchase properties through refinancing. I get the deed ahead of time (short sale technique) and then refinance 100% of the property and pay off the seller getting cash out. The lender is willing to play too! The sale is reported with the deed recording (I guess). But, where will the capital gains report come from in my numbers? Is it from what I report on the deed. Usually you just put $10.00 and other valuable stuff. The refinance is the first mortgage to go down in your name, so could I be liable for the capital gains from $0??? How am I supposed to view all this or am I shooting myself in the foot here?